Trade and production: Malaysia

Agriculture is an important part of the economy at 9.6% of GDP and employs about 10% of the labour force (World Bank 2023). The main products are palm oil, rubber, cocoa, wood production, rice and tropical fruits.

Malaysia is the second largest producer and exporter of palm oil after Indonesia. We explored the effect of dropping the tariff for palm oil into the UK and concluded its removal on accession to CPTPP will not have much impact on the UK’s imports or consumption of palm oil.

Rice is a staple crop in Malaysia, and poultry is the main protein source. In terms of livestock production, the poultry and pork sectors are well developed and relatively strong. Any imports into the country must be halal certified.

The UK does not currently have a trade deal with Malaysia or export health certificates (EHCs) for beef, sheep meat or pork.

Beef

Beef smallholdings are small (typically less than 10 head) with low production inputs and poor marketing, and lack of husbandry innovations.

Consumption is relatively low compared with other countries, at 5.25 kg per person per year (OECD 2023). This is expected to increase by 19% by 2030. The UK does have halal certification for Malaysia but not the market access through EHCs to facilitate it. There are future opportunities for the UK to export beef for high-end retail, as well as low-value cuts and offal.

Malaysia imported an annual average of 153 Kt of beef per year between 2019 and 2021, worth over £340m. The key suppliers were India, Australia, Brazil and New Zealand.

It exported a very small amount of beef, 1 Kt on average per year between 2019 and 2021. This was mainly to neighbouring countries such as Thailand, Singapore, Hong Kong, Vietnam and Cambodia.

Table 1. Beef annual production and trade (2019–2021 average)

Source: Trade Data Monitor

Sheep meat

Sheep production in Malaysia is low, and the number of sheep has dropped over the last five years. Consumption is markedly lower than beef and pork — currently 1.16 kg per person per year — but is forecast to increase by 14% by 2029 (OECD).

Malaysia imported an average of 32.8 Kt of lamb per year between 2019 and 2021, worth around £142m, with Australia and New Zealand supplying 99% of it. Malaysia is heavily reliant on imports due to low domestic supply, and sheep meat is becoming a more popular choice for consumers.

Table 2. Sheep annual production and trade (2019–2021 average)

Source: Trade Data Monitor

Pork

Pork is one of the most consumed proteins in Malaysia — currently, 5.64 kg per capita, which is expected to stay at roughly the same level over the next decade.

An average of 15.4 Kt of pork per year was imported between 2019 and 2021, worth almost £38m. Key suppliers were the EU, Canada, the USA and Australia.

Malaysia exported an average of 1.4 Kt of pork per year between 2019 and 2021, worth almost £3.3m, mainly to Brunei, Indonesia, Thailand and Singapore.

Table 3. Pork annual production and trade (2019–2021 average)

Source: Trade Data Monitor

Dairy

Malaysia has a relatively small dairy industry and relies heavily on imports to satisfy domestic demand. Milk production averages 48 Kt a year.

Butter consumption is currently 0.48 kg per person per year, and cheese is 0.88 kg. Malaysia has a relatively low consumption of dairy compared to other Asian countries; however, this is expected to grow across the different dairy products over the next decade.

As dairy production is low, Malaysia relies heavily on imports to satisfy domestic demand.

It imported, on average, 9.4 Kt of butter per year between 2019 and 2021, worth £40m, with over half coming from New Zealand and a large amount from the EU and Australia. The UK has an EHC for dairy exports to Malaysia and currently exports 28 t of butter on average each year.

Malaysia imported, on average, 33 Kt of cheese per year between 2019 and 2021, worth £119m. The key suppliers of cheese were Australia, New Zealand, the EU and the USA, with 1.5 Kt a year coming from the UK.

Table 4. Butter annual production and trade (2019–2021 average)

Source: Trade Data Monitor

Table 5. Cheese annual production and trade (2019–2021 average)

Source: Trade Data Monitor